Anheuser-Busch InBev Starts Trading on Johannesburg Stock Exchange
January 15 2016 - 5:50AM
Dow Jones News
JOHANNESBURG—The world's biggest brewer, Anheuser-Busch InBev
NV, began trading on the Johannesburg Stock Exchange Friday, the
latest in a series of multinational heavyweights to complete a
secondary listing in South Africa, strengthening the local bourse
even as the broader economy continues to decelerate.
Mega-brewer AB InBev's listing is the most recent step in its
more than $100 billion quest to acquire SABMiller PLC, which has
its ancestral home in South Africa.
SABMiller is the exchange's second-largest company by market
capitalization, and local investors had expressed concerns that an
acquisition by AB InBev could mean losing access to both a major
beer company as well as leave them with fewer options for tapping
global growth through the JSE. The secondary listing is AB InBev's
solution to that problem.
South African regulators allow pension funds to invest just a
quarter of their assets offshore. The remaining three-quarters have
to be invested in South African-listed companies, a designation for
which AB InBev now qualifies. The secondary-listings of major
multinationals on the JSE, including mining behemoth BHP Billiton
Ltd, luxury goods giant Cie. Financiè re Richemont SA and British
American Tobacco PLC, which sells one in eight cigarettes smoked
world-wide, have boosted the exchange, and the fortunes of local
investors, despite a declining domestic economy.
"Pensioners are a lot wealthier than what they would have been
as a result of the structure of our stock market," said Rhynhardt
Roodt, portfolio manager of the 9.3 billion South African rand
($562 million) Investec Equity Fund. "We were very fortunate. These
global multinationals just seem to continue to do well despite a
fragile local economy and the weakening rand."
Economists believe growth in South Africa could decelerate for
the third consecutive year in 2016 to less than 1% annually, as
demand for South Africa's minerals continues to fall and more of
its factories succumb to rising labor costs and erratic electricity
supplies. Meanwhile, the rand has been plumbing all-time lows
against the U.S. dollar and other currencies.
SABMiller's precursor South African Breweries relocated from
Johannesburg to the U.K. in 1999, amid a bout of corporate flight
from South Africa, which at the time—as now—was suffering from a
falling currency and limited access to international investors.
Still, AB InBev Chief Executive Carlos Brito said the listing of
the company in Johannesburg was "a significant vote of confidence
in South Africa as an investment destination."
Write to Alexandra Wexler at alexandra.wexler@wsj.com
(END) Dow Jones Newswires
January 15, 2016 05:35 ET (10:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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